Working Paper: CEPR ID: DP12177
Authors: Lorenzo Caliendo; Ferdinando Monte; Esteban Rossi-Hansberg
Abstract: We study the effect of exporting on the organization of production within firms. Using French employer-employee matched data together with data on a firms exporting activity, we find that firms that enter the export market and expand substantially reorganize by adding layers of management, hiring more and paying, on average, lower wages to workers in all pre-existing layers. In contrast, firms that enter the export market and expand little do not reorganize and pay higher average wages in all pre-existing layers. We then present some evidence that these effects are causal using pre-sample variation in the destination composition of exports, in conjunction with real exchange rate variation across countries. Our results are consistent with a growing literature using occupations to study the internal structure of firms and how their organization responds to opportunities in export markets.
Keywords: firm organization; exports
JEL Codes: D22; F16; J24; J31; L23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| exporting (F10) | organizational structure (L22) |
| exporting (F10) | adding management layers (M54) |
| exporting (F10) | wage adjustments (J31) |
| exporting and significant expansion (F10) | reorganization (L29) |
| not reorganizing (L29) | higher average wages (J31) |
| adding layers (Y60) | decrease in average wages (J31) |
| not changing layers (Y20) | increase in wages (J38) |